MVL latest?

[Maslins]

I know this is an obvious point, but the whole purpose of ER is to provide a tax break. There's no problem with having a tax motivation in seeking a capital distribution and ER, that's the point. The problem arises in relation to the wider set of conditions surrounding the 2yr rule (i.e. all conditions must apply, of which tax motivation is one). The upshot being that, if you plan to retire, for example, there's no problem in closing via an MvL and claiming ER (at least for the foreseeable future).

Yes...which is why I feel that it can always be argued that tax was a motivator, virtually every contractor's going to be a "close company", hence the only criteria they're realistically relying on revolves around "trade/activity". Hence why I think it needs clarification on a new PAYE role.

[jamesbrown]

Yes...which is why I feel that it can always be argued that tax was a motivator, virtually every contractor's going to be a "close company", hence the only criteria they're realistically relying on revolves around "trade/activity". Hence why I think it needs clarification on a new PAYE role.

Yep, and why the comment of the guy leading the consultation needs to be treated with skepticism.

[ChimpMaster]

So many questions....

What if a bricklayer wants to close his bricklaying business and become a permanent/employed carpenter?

What if a mobile phone shop owner wants to close up shop and take up a permanent job as a phone salesman at O2 in Slough?

What if a SAP functional expert wants to close his SAP contracting Ltd Co and become a Cobol programmer?

[pr1]

So many questions....

What if a bricklayer wants to close his bricklaying business and become a permanent/employed carpenter?

What if a mobile phone shop owner wants to close up shop and take up a permanent job as a phone salesman at O2 in Slough?

What if a SAP functional expert wants to close his SAP contracting Ltd Co and become a Cobol programmer?

I've got a load of various shades of grey bricks, please sort them into white and black piles

[northernladuk]

I've got a load of various shades of grey bricks, please sort them into white and black piles

50 shades?

And why does everything come down to race nowadays? You saying the black bricks are worth less than the white ones hey??

[jamesbrown]

So many questions....

What if a bricklayer wants to close his bricklaying business and become a permanent/employed carpenter?

What if a mobile phone shop owner wants to close up shop and take up a permanent job as a phone salesman at O2 in Slough?

What if a SAP functional expert wants to close his SAP contracting Ltd Co and become a Cobol programmer?

On the first two, unless they explicitly remove PAYE employment, you'll never know until the case law is developed.

On the latter, you'd be clearly caught IMO, other conditions being met. I guess there's a sliver of uncertainty, but anything within IT would be dancing on a pinhead IMO, regardless of whether it's pursued as a trade or activity. If you were switching from SAP contractor to lifeguard at the local pond, you'd have an argument.

[pr1]

So many questions....

What if a bricklayer wants to close his bricklaying business and become a permanent/employed carpenter?

What if a mobile phone shop owner wants to close up shop and take up a permanent job as a phone salesman at O2 in Slough?

What if a SAP functional expert wants to close his SAP contracting Ltd Co and become a Cobol programmer?

I've got a load of various shades of purple bricks, please sort them into blue and red piles

[pr1]

What if a SAP functional expert wants to close his SAP contracting Ltd Co and become a Cobol programmer?

presumably a SAP contractor and a COBOL contractor would operate under the same business SIC code i.e. it's broadly the same thing

[jamesbrown]

presumably a SAP contractor and a COBOL contractor would operate under the same business SIC code i.e. it's broadly the same thing

Yeah, I think that's about the right level of abstraction to think about it, possibly even higher (e.g. some codes are pretty similar)...

[MrContractor85]

Question...

Contractors with large company cash reserves need to act now to save thousands in tax

“We have suggested to HMRC that it would be more appropriate to apply the new rules to any liquidation which commences on or after 6 April 2016, rather than should the date of the distribution happen to fall beyond this date.”

Just so I've understood this correctly, an MVL processed and distributed pre-April 2016 will not be subject to the new regulation i.e. 2 year condition, main purpose being tax, etc. So a contractor could in theory open up another company "involved in a similar trade or activity" as long as it's completed before April 2016?